Former prime minister censures French Socialists

ByWilliam Echikson, Special to The Christian Science MonitorJuly 19, 1982

Paris
— As prime minister from 1976 to 1981, Raymond Barre represented economic stability, so much so that his name became a noun. ''Barrism'' meant low budget deficits, slow monetary growth - and above all, a strong franc.

Mr. Barre remains so widely respected for his economic ability that when he first criticized the Socialist government's handling of the franc in February, the French currency dropped further on the international markets. Socialists responded by calling him a ''traitor.''

For a while, Barre stayed relatively quiet. But in a recent interview with the Monitor, he offered a wide-ranging, sharp critique of the Socialists' economics.

''The consequences will be vast,'' he warned. ''Their policy will leave our public finances in complete disorder, create a massive trade deficit, increase the fragility of French money, and rack up excessive foreign debts.''

Mr. Barre's willingness to offer such on-the-record comments demonstrates the surge in the opposition's confidence after last month's devaluation of the franc. The opposition has pounced on the devaluation, France's second in nine months, as evidence that the Socialists are destroying France's economy.

Inflation is running at a 14 percent annual rate, way above the average figure in other industrialized nations. The monthly trade deficit has been sizable. While wages have been shooting up at an annual rate of 18 percent, industrial output is decreasing.

Mr. Barre says he does not believe the Socialists' imposition of wage and price controls will fundamentally alter the economic situation. He holds that France needs a liberal economic program, not a centralized one (using the word ''liberal'' in the classical sense of free-market economics). While in office, the former professor freed prices and loosened government control over industry, a process he contended was essential to improvement of France's international competitiveness.

His disagreement with Socialist economics is therefore fundamental. Increasing government control over the private sector through widespread nationalizations will ''create companies that cannot be competitive,'' he said.

He added that France's remaining large private sector was being squeezed by President Mitterrand's social policies, including higher social security costs, a fifth holiday week, and a one-hour reduction in weekly work hours with no reduction in weekly pay.

The last two of these actions were designed more to increase employment than social justice. Yet Mr. Barre believes this ambitious employment effort is doomed.

''The Socialists are artificially creating employment,'' he said. ''They want to share work, but not share revenues.'' Such a ''policy will just increase employers' costs, and not permit companies to invest or hire more workers,'' Mr. Barre charged.

Nor is he impressed by the Socialists' imposition of austerity measures. For example, he says the government's declaration that it will keep the budget deficit at 3 percent of gross national product is insufficient, arguing that such a deficit would be equal to the whole of France's lendable funds.

''To finance this deficit,'' he warned, ''we will have to create money.'' In Barre's view, printing money as such is a main cause of inflation.

Historically, inflation has been almost a constant problem for the French economy. It is running nearly 9 percent higher than in Germany, France's major trading partner. As a result, Mr. Barre said, French goods cannot compete with their German counterparts, and this will continue to apply pressure for a devaluation of the franc, unless Socialist austerity gives the French inflation an unexpected dousing.

''To stay in the European monetary system, we will be forced to devalue our currency every so often,'' the former prime minister said.

Still, for all his differences with the Socialists, he supports President Mitterrand in his present disputes with the United States over currency intervention and trade with the Soviet Union. At the Versailles summit conference in early June, Mr. Mitterrand urged the US to intervene in the currency markets to help maintain the value of European currencies against the dollar.

''Central banks must stabilize sharp currency fluctuations,'' Mr. Barre said. Even more desirable, he added, would be ''an organized and stable system of exchanges.''

He also joined Mr. Mitterrand in rejecting demands that France dramatically reduce its trade and loans to the Soviet Union. Echoing Mr. Mitterrand, he said such a cutback amounted to ''economic warfare,'' and he asked: ''How can the US sell grain to Russia, and tell us to sell nothing?''

Mr. Barre said he approved of the Mitterrand government's decision to sign the controversial Soviet gas contract. ''Russian gas is a better deal than Algerian gas,'' he said, because it promises more reliable deliveries at a better price. France recently signed a large gas deal with the Algerians.

Even though he agrees with Mr. Mitterrand on these international issues, he remains one of the Socialist President's harshest and most influential critics. He was recently featured on the cover of the newsweekly L'Express as one of the opposition's ''three cavaliers,'' the others being his former boss, Valery Giscard d'Estaing, and Paris Mayor Jacques Chirac.

But as a former professor at the Sorbonne and an international bureaucrat before he took office, he does not have a wide political base. Balding and pudgy in appearance, Barre does not look the politician's part, either.

Still, Mr. Barre remains active in the political arena. Since leaving office, he has become a deputy in the National Assembly. He said he plans to return to some teaching, but clearly he cares about staying in the limelight.

''I have my convictions, and I will criticize when necessary,'' he said. ''I will play the role appropriate for me.''